Shipping and Freight for Distributors: Cost and Reliability

Parcel, LTL, FTL, and your own box truck are different products. A 18 lb carton goes parcel unless you are already on that stoop with a route stop. A 6-pallet, 4,200 lb shipment on a 500-mile lane is usually LTL. A 14-pallet, 19,000 lb shipment on the same lane is a truck. Your own truck wins when density pays for the driver and you need a window the common carrier will not honor.

Segment doors by weekly cube and whether they will wait a day for consolidation. Doors that will wait can move from parcel to a twice-weekly LTL or a pool. Doors that will not wait pay the premium or they get the route if they hit a minimum. A single mode for the book is how you donate margin on the smalls and service on the heavies.

FMCSA authority and insurance are the gate if you run interstate for compensation or if a banner asks for your MC and cargo limits. A sprinter and a hope is not a freight program.

Rule of thumb, not a religion: under ~6 pallets or ~8,000 lb, LTL usually wins on cost if transit is acceptable. Over ~10–12 pallets or ~15,000 lb, FTL often wins on cost and on damage. Between those, run both quotes and add the accessorials LTL will invent — liftgate, limited access, appointment, inside delivery.

Worked fork. 8 pallets, 9,600 lb, 720 miles, class 85. LTL linehaul quote $1,140 plus fuel, plus a likely $45 appointment and $35 liftgate at one store. FTL spot $1,480. If you can fill 2 more pallets from another order on that lane in 24 hours, FTL wins and the damage rate drops. If you cannot, LTL still wins unless the customer will not tolerate a terminal transfer.

Multi-stop FTL is a different animal. Three stops on a 14-pallet truck can beat three LTLs and still need detention rules. Price the third stop. Drivers who 'just swing by' will teach you detention math.

Carriers bill the greater of actual weight and dimensional weight. Dim weight (in-lb) is typically (L×W×H in inches) / 139 for many parcel contracts, or / 166 on older ones — read yours. A 14×14×14 carton of light goods at 8 lb actual can bill like 20 lb. Twenty of those a day is a second freight bill.

Redesign the 20 worst offenders: smaller carton, less void, or a pack that ships as a case instead of two pillows. A $0.40 carton change that saves $1.80 in dim is a 4.5× return without a new carrier contract.

LTL reweigh/reclass is the cousin. If you declare class 65 and the terminal measures class 92.5, the bill changes and you have a short window to dispute. Cube-check the ugly SKUs and print the class you can defend. NMFC / class exists for a reason; guessing is a donation.

Liftgate, residential, limited access, inside, sort-and-seg, appointment, detention, layover, redelivery, notify. They are how a $92 LTL becomes $187. Put a flag on the customer file: dock or no dock, appointment required, hours. Quote the accessorials. A surprise on the invoice is how you eat them or fight the door.

Detention is a dock-clock problem. If your receiving makes carriers wait, inbound detention is your number. If the customer's DC makes your driver wait, outbound detention is a conversation or a fee. FMCSA detention and hours collide when the wait eats the driver's day. That is not a theoretical; it is a missed next stop.

Limited-access and residential codes get slapped on schools, churches, farms, and 'commercial' suites with no dock. Audit them. A school with a loading zone is not automatically limited access. Carriers count on you not reading the bill.

Each month, pull 40–80 invoices. Check class, weight, miles, fuel, and accessorial codes against the contract and the BOL. Dispute inside the carrier's window — often 180 days, sometimes 30 on certain fees. A 3% error rate on a $400,000 freight year is $12,000. The clerk is cheaper.

Duplicate invoices and minimums on cancelled POs show up more than people admit. So do residential flags on industrial parks. Build a short deny-list of codes you will always check.

Do not change carriers the week you finally audit the old one. Clean the bills, then RFP. Otherwise you will import the same mess at a 4% 'better' linehaul.

A pool (or pool-point) takes your FTL or heavy LTL into a city and breaks it into local deliveries — often cheaper and more reliable than 40 small LTLs into the same ring. It is how regional houses serve a distant cluster without a building. Price the break-bulk fee against the LTL you would have bought and the damage you would have eaten.

Pools fail when your labeling is sloppy or when you miss the inbound appointment to the pool. They are a second cutoff. Treat them like a customer DC: ASN, labels, on time. If you cannot hit that, stay on LTL.

Your own route is a pool you own. Density math: GP$ per stop after driver, fuel, and vehicle. Under $70 GP$/stop on a thin Thursday is a candidate for a pool or a will-call, not for a second truck.

Ten 'commercial' drops coded residential ($85 each), four liftgates you could have avoided with a dock note ($55), and two redeliveries because CS gave the wrong hours. $1,870. None of it was on the customer quote. You ate it to 'protect the relationship.' The relationship learned that freight is free.

Fix: customer-file flags, quotes that show the add, and a monthly accessorial report by door. The doors that generate the adds either pay them or move to a route day you control.

Packaging standards belong in the same file. A crushed corner is a claim ratio that will raise your rates next bid. Stretch-wrap recipes and pallet height caps are freight policy, not janitorial.

A routing guide is a lane-and-service list with a backup, not a logo on a mug. Primary carrier by lane, backup if they miss pickup by X hours, and a rule for when sales can hotshot. If the guide lives in someone's head, you will tender on whoever answers the phone.

Claims have a clock and a photo standard. Damage without a photo at delivery is a donation. File inside the window, keep the packaging, and do not let the customer 'just keep it for $20' if the claim is $180 and you still owe the banner a clean pallet. Credit should see the claim file when they argue DSO.

Rank carriers on OTIF, claim ratio, invoice accuracy, and pickup reliability — not on who bought lunch. A 4% cheaper linehaul with a 2× claim rate is not cheaper. Publish the four numbers quarterly and move volume with your feet.

Own the truck when density pays for a loaded driver day and you need a window common carriers will not honor. A fully loaded box-truck day (driver, fuel, insurance, depreciation) at $420 needs about $700–$900 of GP$ on that ring after product cost or you are a very expensive courier. Below that, buy LTL or a pool.

Insurance and FMCSA credentials scale with the first interstate banner. Cargo limits in the bid packet are often $100,000+; your personal auto policy is not a cargo policy. Call the broker before you print 'we deliver' on the line card.

Backhauls on your own truck are free money and fewer empty miles. A supplier pickup on the return from a dense Thursday is operations and sustainability in the same stop. Write the pickup like a customer appointment so it does not become a 90-minute surprise.